Please ensure Javascript is enabled for purposes of website accessibility

Affordable housing shortage spotlights bigger issues, leaders say

Karlee Weinmann//November 4, 2015

Affordable housing shortage spotlights bigger issues, leaders say

Karlee Weinmann//November 4, 2015

National policymakers on Friday urged Twin Cities communities to find creative approaches to expand affordable housing, but local leaders say social and economic barriers severely limit prospects.

A dearth of affordable housing has cities and towns across the state scrambling for a modest pool of funds designed to stoke development. At a Friday discussion organized by U.S. Rep. Keith Ellison, D-Minnesota, the nation’s top housing officer said limited resources require efficiency and innovation.

“There’s no way that we have the resources right now to meet the demand out there for affordable housing,” Secretary of Housing and Urban Development Julian Castro told a room full of community members and officials in Minneapolis. “We need creative partnerships and the energy to find solutions.”

But critics say Minnesota’s racial disparities in income, employment and homeownership spotlight an uneven marketplace that’s increasingly segregated – in part by existing affordable housing policies favored by city and state officials.

Affordable housing projects tend to cluster geographically, often in low-income areas with mostly nonwhite residents. That’s partly because land is generally less expensive in those zones, but it gives way to a bigger problem that several community leaders blame for the broader economic imbalance.

Affluent and predominantly white communities, including first- and second-tier suburbs, have historically been less likely to pursue affordable housing projects. But despite a lower need for such projects within their borders, the lack of diverse housing options stifles opportunities for low- and moderate-income people.

“I am deeply concerned about the current trend of where affordable housing units are placed,” Richfield Mayor Debbie Goettel said at Friday’s discussion at the Mayflower Church in south Minneapolis. “Aggressive policy changes are needed to undo the segregation.”

But affordable housing is frequently a tough sell in places without much demand for it. Even in Richfield, which sits just south of Minneapolis, tensions are boiling over between private property companies and low-income residents.

A 698-unit apartment complex in the city traded hands in a $41 million deal a few weeks ago, but the new owner – an affiliate of Wisconsin-based MLG Capital – doesn’t plan to keep its 35 Section 8 units. Plus, Goettel said, the threat of raised rents will likely push out more residents.

A take-it-or-leave it approach to affordable housing by many cities and private investors is curtailing the use of an important tool in bridging economic and social gaps, affordable housing advocates said.

But a different strategy that encourages partnership with developers coupled with more intentional investments could help level the economic playing field. Affordable housing should be part of a broader buy-in, said Paul Williams, who heads the Minneapolis-based nonprofit Project for Pride in Living.

Williams, the former deputy mayor of St. Paul, cited the city’s development along University Avenue, where the $1 billion Green Line light rail transit route ignited new housing development and drove business to the corridor. But most of the construction to date has consisted of market-rate, luxury and student units.

“Smart cities make these investments in a more holistic way,” he said.

Affordable housing is a critical piece of federal and state housing agendas. Last week, the Minnesota Housing Finance Agency awarded $92.4 million to affordable housing projects around the state – a contribution that covered only one-third of the projects that requested funding.

On Castro’s watch, the U.S. Department of Housing and Urban Development attached conditions to its funding meant to ensure that cities meet fair housing obligations.

It’s not enough to quiet the clamor for more housing units and better rental practices, but Ellison said national and local initiatives to prop up affordable housing form a solid platform for addressing the problems that feed into the housing gap.

“If we can create prosperous communities for white people,” he said, “we can do it for everybody.”

Top News

See All Top News

Legal calendar

Click here to see upcoming Minnesota events

Expert Testimony

See All Expert Testimony